Poland’s biggest oil refiner PKN Orlen and number two player Grupa Lotos said on Thursday their management boards had approved plans for a merger first announced in 2018 but delayed by antitrust issues.
Both companies are state controlled and the merger is part of a wider plan by Poland’s ruling Law and Justice (PiS) party to increase control over the economy and build big national companies that will, authorities argue, be better compete with global players.
PKN Orlen acquired the nation’s gas monopolist PGNiG in January of last year, consolidating much of the country’s energy sector. That transaction came under scrutiny by EU and national authorities, although the EU Commission gave its clearance for the Lotos acquisition, which have been ongoing since early 2021.
For the merger to take effect shareholders of both groups must approve the share exchange. Shareholders owning at least 80% of Lotos shares have to back the merger terms to approve it.
General shareholders meetings are expected to be held in July, while the merger should be registered and finalised in August.
PKN Orlen had announced plans to buy Lotos in 2018, but had to meet conditions set by the European Commission. In January, PKN said it would sell some Lotos assets to companies including Saudi Aramco and Hungary’s MOL to fulfill EU antitrust rulings and complete its takeover.
Critics, including Poland’s several former economy ministers, said selling Lotos’s assets, including a stake in the Gdansk refinery and a large chunk of its retail network to MOL, lacked transparency and could result in domination of Russian fuels on the local market.
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